T H E STAGES OF E C O N O M I C G R O W T H

On the jacket of W. W. ROSTOW’S The Stages of Economic Growth: A Non-Communist Manifesto, the publisher advertises the product in these te rm: “This book is a generalization from the whole span of modern history. It gives an account of economic growth based on a dynamic theory of production and interpreted in t e rm of actual societies. I t helps to explain historical changes and to predict major political and economic trends; and it provides the significant links between economic and non-economic behavior which KARL MARX failed to discern.” The author’s own sales-pitch is equally strident: “The stages are not merely descrip- tions. They are not merely a way of generalizing certain factual observations about the sequence of development of modern societies. They have an inner logic and continuity. They have an analytical bone-structure rooted in a dynamic theory of production” (pp. I 2 f.). And the reasons for this enthusiasm is not only the light which the new theory is supposed to shed upon the process of economic and social evolution but also its alleged power to dispose once and for all of the Marxian dragon with which so many others have done battle but failed to slay. The reader is urged to “note the similarities between his (MARX’S) analysis and the stages of growth; and the differences between the two systems of thought, stage by stage”.

We propose to accept this invitation and to carry out the comparison which Professor ROSTOW suggests. In what follows the first section will deal with the stages-of-growth scheme’s contribution to the theory of economic development. The second section will attempt to answer the question whether Marxian thought is capable of surviving this newest assault.

I

Such attention as Professor ROSTOW’S writing have hitherto been able to command in the literature on economic development has been based upon some ofhis earlier empirical studies. His theoretical contributions have been meager-in fact, largely confined to various types of classification. Does his latest effort significantly change this picture?

Professor ROSTOW advances three propositions. First, he insists that the problem of growth is a historical one which must be considered within a frame- work of a historical periodization. Second, he emphasizes-and this is perhaps his most notable point-that economic growth is not a continuous and smooth but a discontinuous and dialectical process which pivots on a sudden revolutionary transformation, the “take-off into self-sustained growth”. Third, he stresses a particular aspect of this discontinuity of economic growth: that it proceeds not by a balanced development of all sectors of the economy, but by successive leaps forward of the economy’s “leading sectors”.

These are undoubtedly valuable insights, although it can hardly be said that they are new or that they originate with Professor ROSTOW. That theories of

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growth must be historical was perhaps the first discovery of political economy; it has merely been forgotten in the century or so in which economic growth was almost wholly neglected in academic economics, except for the Marxists and those who, like the Germans and SCHUMPETER, accepted much of the Marxist Frage- stellung on the subject. The “take-off” is merely another name for the “industrial revolution” which was the basic analytic concept of modern economic history from the days of ENCELS to those of MANTOUX until smothered by the gradualist criticism of CLAPHAM, ASHTON, and others between the two wars. The argument for uneven development is equally old. I t was advanced by ~ R X , developed by LENIN, and underlies the SCHUMPETER-KONDRATIEV analysis of I 9th century economic development’. To be sure, the rediscovery of old truths is a most credit- able accomplishment-particularly in contemporary “behavioral sciences” where apparently any nonsense goes as long as it has never been said before-though not one calling in itself for a major ovation.

But when we come to consider Professor ROSTOW’S other achievements in the field of the theory of growth, the weaknesses are all too obvious. The first and most serious is that his theory of “stages” actually tells us nothing except that there are stages. The four other stages are implicit in the “take-off”, and add nothing to it. Given a “take-off” there must obviously be astage before it,butwhen theconditions for economic growth are not present another when the pre-conditions for the “take-off” exist, and yet another following it when “an economy demonstrates that it has the technological and entrepreneurial skills to produce not everything, but anything it wants” (which is ROSTOW’S definition of the stage of “maturity”), and yet another when it has acquired the capacity to produce everything it wants (p. I O ) ~ . Indeed, there is no departure (“take-off”) of any kind-in the history of nature, ofsocieties or of individuals-which cannot be thought ofas being preceded and followed by a number of “stages”. If one has a penchant for symmetry one only has to make sure that the total number ofstages-the “take-off” included- should be uneven.

Thus once we have one corner, we have the entire Pentagon. One weakness of this procedure is, of course, that analysis must remain confined to its area. Ac- cordingly, the Rostovian stage theory, despite its comprehensive historic and sociological claims reduces economic growth to a single pattern. Any and every country, whatever its other characteristics, is classifiable only in respect to its position on the stepladder, the middle rung of which is the “take-off”. This gives the Rostovian stages an air of spurious generality-they appear to apply to any and all economies, to the USSR as to the USA, to China as to Brazil-which, as we shall see, is not without its ideological implications, though it overlooks the obvious fact that, however universal the technical problems of economic growth

I. Cf. also A. F. BURNS, Raducfion Tmds in fhe Unifcd Sfales since 140, New York 1934. 2. This stage ROSTOW misnames “the age ofhigh mass consumption” for both by the logical requirements

ofhis schema and by his own observations on the subject (pp. 73/74) what characterizes it is not fundamentally mass consumption (which is only one of the alternative uses to which resources can be put by society) but abundance. This error in nomenclature is by no means trivial; it is associated with ROSTOW’S misleading treatment of the current stage of the United States’ economic development, when armmmls rather than m a s consumption represent the economy’s “leading sector”.

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may be, different social types of economic organization can, or must, solve them in very different ways.

Yet even within its extremely narrow limits the Rostovian theory can neither explain nor predict without introducing considerations that are completely irrelevant to the stage schema. I t simply fails to specify any mechanism of evolution which links the different stages. There is no particular reason why the “traditional” society should turn into a society breeding the “preconditions” of the “take-off”. ROSTOW’S account merely summarizes what these preconditions must bes, and repeats a version of that “classical answer” the inadequacy of which has long been evident: a combination of the “discovery and rediscovery of regions beyond Western Europe” and the “developing of modern scientific knowledge and attitudes” (p. 31). Here is the deus cum muchina. Nor is there any reason within the Rostovian stages why the “preconditions” should lead to the “take-off” to maturity, as is indeed evidenced by ROSTOW’S own difficulty in discovering, except long expost fucto, whether a “take-off” has taken place or not4. In fact the Rostovian “take-off” concept has no predictive value. Similarly, when it comes to analyzing the “inner structure” (p. 46) of the take-off or of any other stage, the Rostovian theory subsides into statements of the type that “things can happen in any one of a very large number of different ways”, which constitute a rather limited contribution to knowledge6.

Such explanations and predictions as ROSTOW attempts are therefore little more than verbiage which has no connection with his stages theory or indeed with any theory of economic and social evolution, being generally based on what might be charitably called coffeehouse sociology and political speculation. The nearest he actually comes to an attempt at an explanation of why economic growth takes place is his emphasis on the importance of “reactive nationalism” and the crucial role of “an inherently competitive system of power” (pp. tog and 151 n) in which states are historically enmesheds. The explanation tends to be circular-when a country has economic growth it is evidence of reactive nationalism7-as well as

3. And this not with any great perspicacity. Thus one would suppose that agricultural change creates the preconditions of industrialization not merely by supplying “expanded food, expanded markets, and an expanded supply of loanable funds to the modern sector” (p. 24) but also-and perhaps decisively-an expanded labor force for it.

4. Cf. the hesitations reflected in the footnotes to his table of “take-off?’ (p. 38) and his inability t o decide “whether the take-off period will, in fact he successful in the six contemporary economies attempting take-off” (p. 44) as wellas his failure tocope with the phenomenonofrelapse after apparent take-offs.However critics, and especiallystatisticians, should resist the easy temptation Rosrow thus provides to reject the entire concept of economic development by industrial revolution.

5. For example: “Perhaps the most important thing to be said about the behavior of these variables in historical cases oftake-off is that they have assumed many different forms. There is no single pattern. The rate and productivity ofinvestment can rise, and the consequences ofthis rise can be diffused into a self-reinforcing general growth process by many different technical and economic routes, under the aegis of many different political, social and cultural settings, driven along by a wide variety ofhuman motivations” (p. 46). Or, we may add, they may not rise, and may not be diffused ...

6. “The general case is ofa society modernizing itseliin a nationalist reaction to intrusion or the threat of intrusion from more advanced powers abroad” (p. 34).

7. Cf. pp. 34/35 where the attempt is made, half-hcartedly, to assimilate the pioneer industrialization of Britain tothis patternon noothergrounds than that otherwise it wouldnot fitthe “general case”. Admittedly, i i a theory of economic evolution cannot explain the case which needs explaining most, namely the very first “take-off” in history, it is little more than scrap paper, though Professor ROSTOW does not seem too keenly aware of this. Cf. p. 27.

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open-ended: when an obviously nationalist country does not initiate a take-off, it is because “nationalism can be turned in any one of several directions” (p. 29). Moreover, even this type of explanation is crippled by ROSTOW’S refusal to admit the profit motive into his analysis, a refusal not concealed by an occasional parenthetical remark granting its existence*. Still, weak as it is, the explanation of economic growth by nationalism and the logic of international rivalry is the closest ROSTOW comes to an analysis of economic development as distinct from re- labelling and classifying it.

And this is not very close. For in addition to an incapacity to answer relevant questions, Professor ROSTOW shows an astonishing lack of ability for even recog- nizing their existence or their import. Thus one of the crucial problems which faces both the theorist and would-be planner of economic development under capitalist conditions is that “the criteria for private profit-maximization do not necessarily converge with the criteria for an optimum rate and pattern of growth in various sectors” (p. 50) , indeed, that under pre-industrial conditions or in underdeveloped areas it can be shown that they are more likely than not to diverge. The statesman or economic administrator of a backward country knows that a century of western capitalism has failed to transfer any country across the gap which separates the advanced from the backward economies. He also knows that profit-oriented private investment can be relied on to build his country’s tourist hotels but not its steelworks. Consequently he has increasingly taken to imitating the Soviet method of achieving economic growth, which does not suffer from this disadvantage, rather than relying on the 19th-century European or American method which does. ROSTOW neither explains any of these facts which determine the actual problem of economic development in underdeveloped areas, nor does he even seem aware of them beyond the casual mention already quoted. Conversely, the historian must explain why, in spite of this divergence, or lack of convergence, a limited number of countries around the North Atlantic in the 18th and rg th centuries actually managed to industrialize on a capitalist basis. ROSTOW appears equally oblivious of this problem.

This obtuseness is not accidental. Indeed, the nature of Professor ROSTOW’S approach makes it impossible for him to solve such problems, and difficult even to realize their existence. For if we argue that the main motor of economic change was a t no time “profit-maximization (in the sense of) economic advantage” (pp. 149ff.), we can hardly deal with, let alone answer questions which arise from the fact that all economic development between the “traditional” society and the appearance of the USSR was actually capitalist development and which calls therefore for an analysis of the specific characteristics of capitalism. If we abstract from everything that separates “eighteenth century Britain and KHRUSHCHEV’S Russia; MEIJI Japan and MAO’S China; BISMARCK’S Germany and NASSER’S Egypt” (p. I ) , we shall be unable to explain why NASSER’S Egypt finds KHRUSH- CHEV’S Russia a more useful guide to economic development than eighteenth cen-

8. Cf. on p. a8 “The merchant has always been present, seeking in modernization not only the removal of obstacles to enlarged markets and profits, but also the high status denied him”, but especially the re- markably contorted pages on colonialism (p. 108-1 11).

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tury Britain. Ifwe are anxious to minimize the element of economic advantage in the relation between advanced and dependent (colonial) economies (pp. 108-1 I 2,

I 37/38, 156), we shall be unable to say anything useful about problems which arise out of the fact that dependent economies are dependent.

Why, it may be asked, should a man adopt a theoretical approach so obviously defective and indeed self-defeating? At least one plausible answer may be sug- gested. Professor ROSTOW, is, on his own admission, primarily concerned not with arriving at a theory of economic development, but with writing a “non-communist manifesto”. Unlike other and wiser-we shall not say abler--scholars with similar objectives, he has chosen to abandon not merely MARX’S conclusions and his arguments, but even the basic posing of the problem of economic development as MARX saw it. I t was, as we have tried to show, an unwise decision, for the Marxian questions are fundamental to any attempt at an understanding of the process of economic development. What is required is at least an understanding of MARX’S questions. To that level Professor ROSTOW has yet to rise.

P . A . BARAN AND E. J. HOBSBAWM

I1

An examination of the principal tenets of Ros~ow’s theory of economic growth-if it can be at all said that such a theory is advanced in his book-thus reveals nothing that can be considered an addition to our knowledge of the history of economic development or an enrichment of our understanding of the processes involved. But ROSTOW offers something much more ambitious than “merely” a new theory of economic growth. He also proposes “a comprehensive, realistic and soundly based alternative to MARX’S theory of how societies evolve”. Let us examine this latest effort to put MARX into the waste basket. Since, however, it is neither possible nor would it be rewarding to trace all the misconceptions and mis- representations of Marxian thought which ROSTOW has managed to compress in a few pages, we will have to limit ourselves to two problems which ROSTOW himself considers to be central to his Manifesto.

The first relates to the nature of the engine which propells economic, social, and political evolution in the course of history. To this fundamental question, historical materialism provides a comprehensive and sophisticated answer. Far be it from us to seek to emulate ROSTOW in the claim that this answer supplies pat solutions to all problems raised by the complex events and patterns of history. What historical materialism does claim is to have discovered an indispensable approach to the understanding of historical constellations and to have focused attention on the nature of the principal energies responsible for their emergence, transformation, and disappearance. To put it in a nutshell: these energies are to be traced back to the always present tension between the degree of development of the forces of production on one side, and the prevailing relations of production on the other. To be sure, neither “forces of production” nor “relations of pro- duction” are simple notions. The former encompasses the existing state of ration- ality, science, and technology, the mode of organization of production and the degree of development of man himself, that “most important productive force of

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all” (MARx). The latter refers to the mode of appropriation of the products of human labor, the social condition under which production takes place, the principles of distribution, the modes of thought, the ideology, the Weltanrchauung which constitute the “general ether” (MARX) within which society functions at any given time. The conflict between the two-sometimes dormant and sometimes active-is due to a fundamental difference in the “laws of motion” of forces and relations of production respectively. The forces of production tend to be highly dynamic. Driven by man’s quest for a better life, by the growth and expansion of human knowledge and rationality, by increasing population, the forces of pro- duction tend continually to gain in strength, in depth and in scope. The relations of production on the other hand tend to be sticky, conservative. Prevailing systems of appropriation and social organization, and political institutions favor some classes and discriminate against, frustrate, oppress other classes. They give rise to vested interests. Modes of thought freeze and display a tenacity and longevity giving rise to what is sometimes referred to as “cultural lags”. When the forward movement of the forces of production becomes stymied by the deadweight of dominant interests and the shackles of dominant thought, one or the other has to yield. And since a dominant class never willingly relinquishes its time-honored privileges (partly for reasons of self-interest and partly because its own horizon is more or less narrowly circumscribed by the prevailing ideology sanctifying those very privileges), the clash tends to become violent. This is not to say that obsolete, retrograde relations of production are always burst asunder and swept away by revolutions. Depending on the circumstances prevailing in each individual case, the process unfolds in a wide variety of ways. Violent upheavals “from below” and relatively peaceful transformations “from above” are as much within the range of possibilities as periods of protracted stagnation in which the political, ideological, and social power of the ruling classes is strong enough to prevent the emergence of new forms of economic and social organization, to block or to slow a country’s economic development.

MARX’S historical materialism insists, however, that the development of the forces of production has thus far been the commanding aspect of the historical process. Whatever may have been its vicissitudes, whatever may have been the setbacks and interruptions that it has suffered in the course of history, in the long run it has tended to overcome all obstacles, and to conquer all political, social and ideological structures subordinating them to its requirements. This struggle between the forces of production and the relations of production proceeds uneven- ly. Dramatic conquests are less frequent than long periods of siege in which victories remain elusive, imperfect, and impermanent. Different countries display different patterns which depend on their size, location, the strength and cohesion of their ruling classes, the courage, determination and leadership of the under- privileged; on the measure of foreign influence and support to which both or either are exposed; on the pervasiveness and power of the dominant ideologies (e.g. religion). Moreover, the course taken by this struggle and its outcome differ greatly from period to period. Under conditions of capitalism’s competitive youth they were different from what they have become in the age of imperialism;

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in the presence of a powerful socialist sector of the world, they are not the same as they were or would have been in its absence. No bloodless schema of 5 (or 3 or 7) “stages” can do justice to the multitude and variety of economic, technological, political, and ideological configurations generated by this never-ceasing battle between the forces and relations of production. What MARX and ENCELS and LENIN taught those whose ambition it was to learn rather than to make careers by “refuting” is that these historical configurations cannot be dealt with by “a generalization from the whole span of modern history”, but have to be studied concretely, with full account taken of the wealth of factors and forces that participate in the shaping of any particular historical case.

To forestall a possible misunderstanding: the foregoing is not intended to advocate renunciation of theory in favor of plodding empiricism. Rather it suggests the necessity of an interpenetration of theory and concrete observation, of empirical research illuminated by rational theory, of theoretical work which draws its life blood from historical study. Consider for instance any one of the many existing underdeveloped countries. Pigeonholing it in one of ROSTOW’S “stages” does not bring us any closer to an understanding of the country’s economic and social condition or give us a clue to the country’s developmental possibilities and prospects. What is required for that is as accurate as possible an assessment of the social and political forces in the country pressing for change and for develop- ment (the economic condition and the stratification of the peasantry, its political traditions and its ideological make-up, the economic and social status, internal differentiation and political aspirations of the bourgeoisie, the extent of its tie-up with foreign interests and the degree of monopoly prevailing in its national business, the closeness of its connection with the landowning interests and the measure of its participation in the existing government; the living and working conditions and the level of class consciousness of labor and its political and organ- izational strength). Nor is this by any means the entire job. On the other side of the fence are the groups, institutions, relations, and ideologies seeking to preserve the status quo, obstructing efforts directed towards its overturn. There are wealthy land-owners and/or rich peasants; there is a segment of the capitalist class firmly entrenched in monopolistic positions and allied with other privileged groups in society; there is a government bureaucracy interwoven with and resting upon the military establishment; there are foreign investors supported by their respective national governments and working hand in hand with their native retainers. Only a thorough historical-materialist analysis, piercing the ideological fog maintained by the dominant coalition of interests and destroying the fetishes continually produced and reproduced by those concerned with the preservation of the status quo, only such historical-materialist analysis can hope to disentangle the snarl of tendencies and countertendencies, forces, influences, convictions and opinions, drives and resistances which account for the pattern of economic and social development. And it is to this Marxist undertaking that Professor ROSTOW offers us his alternative: to assign the country in question to one of his “stages”, and then to speculate on the “two possibilities” with which that country is con- fronted: it will either move on to the next “stage”--or it won’t. And if it should

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move to the next “stage”, it will again face two possibilities: it will either stay there for a while, or it will slide back again.

We may now turn briefly to Professor ROSTOW’S other sally against MARX by which he seeks to provide “significant links between economic and non-economic behavior which KARL MARX failed to discern”. This enterprise, he apparently feels, will deliver the “coup de grice” to Marxian thought, “for”, he assures US “it is absolutely essential to Marxism that it is over property that men fight and die” (p. 151). What KARL MARx--“a lonely man, profoundly isolated from his fellows”4id not discern, but Professor ROSTOW does, is the following: “Man.. . seeks, not merely economic advantage, but also power, leisure, adventure, continuity of experience and security.. . in short, net human behavior is. .. not an act of maximization, but.. . an act of balancing alternative and often con- flicting human objectives.” “This notion of balance among alternatives”, Pro- fessor ROSTOW observes “is, of course, more complex and difficult than a simple maximization proposition; and it does not lead to a series of rigid, inevitable stages of history”. We submit that this “notion” may well be “complex and diffi- cult” but that it is also singularly devoid of any ascertainable content. I t is re- markable how Professor ROSTOW, after having constructed a strawman bearing no resemblance to Marxism finds it beyond his powers to vanquish even such a “hand-picked” enemy.

Indeed-to put it bluntly-the whole argument is too helpless to serve even as a starting point for a serious discussion. Even a passing acquaintance with the most important writings of MARX, ENCELS, and more recent Marxist writers is all that is required to realize the irrelevance of ROSTOW’S caricature of Marxism. Far from asserting that “history is uniquely determined by economic forces”, and far from ignoring the “significant links between economic and non-economic behavior”, the theory of historical materialism advanced by MARX and his followers is nothing if not a powerful effort to explore the manifold, and historically changing connections between the development of the forces and relations of production and the evolution of the consciousness, emotions, and ideologies of men. So much so that the Marxian theory of ideology has served as the point of departure and as a guide to an entire discipline known under the name of “soci- ology of knowledge”, with all analytical history of religion, literature, art and science deriving its inspiration for the same source. MARX’S theory of alienation anticipating much of the subsequent development of social psychology, is in the center of modern study and criticism of culture. MARX’S political theory has served as a conceptual basis for most that is valuable in modern European and American historical scholarship. And The Eighteenth of Brumaire of Louis Bonafiarte- to name only one unsurpassed gem of historical and sociological study-still shines as a model of a comprehensive and penetrating analysis of the “significant links between economic and non-economic behavior” in one particular historical case.

But all this escapes Mr. ROSTOW who is not only incapable of contributing anything to the discussion of the relevant problems but even fails to comprehend the context within which they arise. For the problem of the “links between

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economic and non-economic behavior”, or for that matter of the explanation of any human activity, economic or other, is not and never has been whether or not man “balances alternatives” or “adheres to the principle of maximization” (which terms, incidentally, if they mean anything at all, amount to exactly the same), no more than there is meaning to the question whether man does or does not have “freedom ofwill”. Noone in his right mind-marxist, mechanical materialist, or idealist-has ever denied that men make choices, exercise their wills, balance alternatives, or, for that matter, move their legs when they walk. The problem is and always has been to discover what determines the nature of the alternatives that are available to men, what accounts for the nature of the goals which they set themselves in different periods of historical development, what makes them will what they will in various societies at various times. To this fundamental question there have been several answers. The theologian’s solution has been that all human acts and decisions are governed by the omnipotent and inscrutable will of God. The idealist who substituted the human spirit for the Deity arrives at a very similar position, unable as he is to explain what accounts for the actions and transactions of the spirit. The adherents of “psychologism” view human activity as an emanation of the human psyche itself an aspect of an eternally constant human nature8.The historicalmaterialist considers human actions andmotivations to be complex results of a dialectical interaction of biotic and social processes, the latter continually propelled by the dynamism of the forces and relations of pro- duction as well as by the ideological evolutions deriving from them and influencing them in turn. Professor ROSTOW, however, has the simplest solution of all : he does not know what the answer is, nor does he appear to care. Anything can happen: man moves hither and thither, balancing alternatives, making choices, striving for power, engaged in maximization of who knows what. And this is the new, original, unprecedented “theory” which makes good what KARL MARX failed to discern.

We owe the reader an apology. Taken by itself ROSTOW’S Manifesto does not call for a lengthy review. If we have undertaken to write one nevertheless, it is because of considerations from the realm of the sociology of knowledge. His is an important document. I t demonstrates in a particularly striking way the low estate to which Western social thought has declined in the current era of the cold war.

Stanford University, California Birkbeck College, London

PAUL A. BARAN E. J. HOBSBAWM

9. For a somewhat more extensive discussion of this Cf. PAUL A. BARAN, MmXirm and Psychoanalysis. Monthly Review Press, New York 1960.